Heartland Express (NASDAQ: HTLD) announced Wednesday “substantial enhancements” to driver pay, increasing pay rates for the fifth time in six years.
“As we reflected back on what has transpired over the course of 2020, and what our drivers have been through, this pay increase is a sign of appreciation for everything they have overcome. Their dedication to keep America moving and maintaining Heartland Express as an industry leader has been outstanding,” stated CEO Mike Gerdin.
The North Liberty, Iowa-based truckload (TL) carrier reported that rate increases to drivers will be as high as 12.2%, depending on the region and the amount of home time the route allows. New-hire rates will start as high as 56 cents per mile for drivers with one year of experience and 60 cents per mile for drivers with a decade of experience.
Gerdin also linked the increases to driver recruitment.
“With this latest driver pay package, we also wanted to extend our gratitude to other professional drivers within our industry should they choose to join the Heartland Express team,” he added.
Truck capacity has been tight the past several months as consumer spending, especially for retail consumables, has spiked and inventory replenishment remains in full swing. Another headwind to capacity has been significant declines in the number of available drivers due to COVID-19 fears, the impact of the Drug & Alcohol Clearinghouse and low driver school enrollment.
The press release said existing company drivers can make as much as 65 cents per mile based on how long they have been with Heartland. The company will continue to pay fixed wage increases to drivers with up to 20 years of combined experience. Drivers will also continue to earn 3-cent-per-mile annual safety bonuses on all miles driven and 5 cents per mile for miles in the Northeast U.S. “Green Zone” and Canada.
The average increase is approximately 6% across the company’s current driver base.
The carrier’s third-quarter report showed only a modest increase in salaries, wages and benefits expense, up 20 basis points year-over-year. The robust pay package put forth Wednesday will likely negatively impact the adjusted operating ratio, which was 81.5% in the period, moving forward.
“Our customers expect us to deliver and our drivers have done exactly that through the many obstacles they have faced this year,” concluded Gerdin.
